Just when you thought you had seen the last of my cybercrime-related articles in the "Friction Fridays" series, I’m ready to burn you up with more fuel for the fire. This is about the cybercrime and identity theft insurance coverage that you are soon to have shoved down your throat by your insurance agent.
According to the FBI, there were nearly 8 million property crimes in 2015, with victims of these crimes suffering more than $14 billion in losses.
But according to Symantec, as big as that number is, these property crime losses don’t come anywhere close to the nearly $30 billion in estimated losses that cybercrime inflicted on American consumers.
You see, today’s criminals aren’t just interested in your televisions, computer hardware, jewelry and automobiles, they want your digital information, too. And the reality is that digital theft is far outpacing, and out-valuing, traditional theft and robbery.
Our more mobile society with everyone connected in almost every way, including smartphones, tablet devices, home and work computers is just a fraction of the cyber-connectivity factor driving cybercrime. While these more common devices contain sensitive information like social security and tax identification numbers, they also house birthdates – yours, your family, your friends.
Does your computer remind you when your boyfriend Johnny is having his 21st birthday or your sister Sally is having her 45th birthday?
The wealth of digital data does not stop there. Many of these conveniences, especially those used on a mobile basis, contain bank names, account numbers and even passwords, along with similar information for your credit cards.
The criminals don’t have to steal your smart phone to get to the data, they can simply do a digital heist that gleams the information right out of the device, especially when you're using a public WiFi.
While you sit enjoying your mocha-fu-fu-chino and surfing the web for a great deal on next summer’s hottest bikini, that guy just one booth over from you in the coffee shop already has hacked into and is downloading the contents of your laptop, smart phone or tablet.
It isn't long before either the thief or someone he sells your data to is using your information to their advantage. Identify theft can be life changing, even if you don’t have a lot of money in your bank account or a big credit line.
The damage done by someone using your information to open new bank accounts and secure credit cards in your name, but under their temporary control can haunt you for years.
Ten years after the theft, when you and your spouse go to purchase your new home, there are three unknown outstanding credit cards in default in your records that can totally wipe out your chances of that home loan – at least until you resolve the matter to the satisfaction of the lender. And by then that perfect first home may be long gone.
What about when the IRS comes knocking at your door in regard to the unpaid taxes on that $8,000 of 1099-income from three years ago that was reported under your social security number.
Of course, that wasn’t you. Someone had given out your number in lieu of their own, so they could avoid paying taxes. But until you can get it resolved, the IRS has filed a lien on your checking account.
Sound like fun?
What’s more, it isn’t just one criminal involved here. The damage can last for years, because your information is being sold and bought numerous times by different parties across the internet. Your ‘digital life’ is a thriving commodity for them, and now has become a serious liability for you.
Yes, indeed, there are certain consumer protections that restrict your losses from bank accounts and credit cards when fraud is promptly reported, but they take time to implement and reverse financial losses, even when you know about the problems.
What about when that credit card you didn’t know existed is finally turned over to collections after 18 months of default? The hassles of resolving that can be life-changing – consuming hours of your precious time to convince someone you didn’t take out that credit card.
And if this is the first alert you have as to the identity theft, you can count on the fact the nightmare has just begun.
While there are services out there to monitor your risk, they are not much more than an advanced form of round-the-clock credit monitoring looking for suspicious activity involving your personal information. Most have proven to be only partially effective in stopping or preventing activities that may damage your digital value.
Some homeowners’ insurance policies provide limited protection related to cybercrimes against you and your family. Some carriers may offer riders with additional coverage options to help pay for the costs associated with credit restoration or actual losses. But even these tend to have gaps in coverage.
Many insurance companies now offer other cybercrime and identify theft policies with much broader coverage and related resources that will help restore your good name and credit.
But even with this coverage, it’s difficult to be made fully whole again.
So, the question becomes, should you really have to purchase a policy of this type to safeguard yourself against growing cyber threats?
Obviously, that's a question you must answer for yourself, as is with most risks in life. Do you risk the possibility of a cybercrime being committed against you, or do you take steps to protect yourself and mitigate the risk?
When we start driving a car, we're told, “You must have auto insurance” in case of an accident. When we take out a mortgage to buy a home, we are told, “You must have homeowners’ insurance” in case of fire, flood or storm.
Even when we buy a smartphone, the carrier likely asks if we want to purchase replacement insurance for a few extra dollars per month.
We buy health insurance to cover against the costs of major medical expenses, accidental injury coverage to pay for when we can’t work and life insurance to help protect our survivors in case we kick the bucket.
So, now my insurance agent tells me I need a "cybercrime and identity theft" policy. That really burns me up, because in my mind I'm asking, "Who is really is robbing me here?"
Oh well, how much is the initial coverage premium?